East Coast States Have Limited Power Plant Pollution for Years, and It Works

Since the EPA announced new carbon pollution limits for existing power plants recently, the polluting industry’s lobbyists and their political allies have trotted out their usual apocalyptic cries of economic doom. Every time we take steps to improve health and public safety they tell us that doing so would crush the economy and kill jobs. This time around the partisan extremists are comparing EPA to terrorists.

Interestingly, the companies that actually own the power plants in question are rolling up their sleeves to figure out how to reduce pollution in the smartest and most efficient way possible. Even major electric utility companies like American Electric Power and Southern Company – not traditionally at the forefront of clean energy investment – say they want to shape the new standards, not prevent EPA from moving forward. And nearly 200 innovative American businesses and investment firms have sent a letter to President Obama and Congressional leaders this week, expressing their support for the standards.

NRDC’s own analysis shows power plant standards done right can deliver huge economic benefits, as states shift more of their energy dollars to clean resources like energy efficiency, wind and solar power, putting hundreds of thousands of building contractors, plumbers and electricians to work helping our homes and businesses reduce their energy bills with better lighting, high efficiency heating and cooling systems, advanced windows and insulation. States across the country have already shown they can scale up investment in efficiency quickly and lower energy bills even as we lower pollution. Check out my colleague Sheryl Carter’s blog for more detail on how efficiency will play a critical role as states and utilities decide how to meet the new standards and the latest from Environmental Entrepreneurs on the kind of jobs we’re going to be seeing a lot more of.

Shifting energy dollars to clean resources also helps states keep energy dollars in their local economies. Even states that think of themselves as “coal” states because they rely heavily on coal-fired power plants can reap huge benefits by sending fewer dollars out of state to import coal and natural gas and instead investing those dollars in efficiency, solar and wind at home. According to a great analysis by UCS, Missouri sends more than a billion dollars out of state every year to import coal – why is that good for their state economy?

But you don’t need to take NRDC or UCS’s word on this. We actually have real-world experience in the Northeast and Mid-Atlantic states and can see on the ground what happens when states, utilities, consumers, environmental groups and business leaders come together to figure out how to reduce pollution in a smart way. And yes, during the process the same polluter lobbyists came up from Washington and told us it would be the end of western civilization as we know it. They literally said that. First the states would kill coal, and then they would kill the railroads, and it was pretty much downhill from there.

What actually happened?

Republican and Democratic governors from the states went forward and developed the Regional Greenhouse Gas Initiative (RGGI—pronounced “Reggie” for short), which went into effect on January 1, 2009 and has been delivering economic and environmental benefits for participating states just as planned. It works its magic by requiring polluting power plants of a certain size (25 megawatts) to purchase pollution permits for the amount of carbon pollution they dump into our already overloaded atmosphere. The participating states then use the proceeds from the sale of those permits for energy efficiency, renewable energy and other climate solutions, as each state sees fit.

Now, not only is carbon pollution in the region down by close to 30 percent with RGGI’s help, but the area has experienced reduced electric rates, beefed-up economic growth, substantial consumer savings on energy bills, serious job creation, and cleaner air for our kids to breathe. And the entire RGGI region as a whole is well on its way to meeting the new federal standards. (California also has a similar program in place and is reaping similar benefits.) Specifically, since 2009 we in the RGGI region have enjoyed:

an average 8 percent drop in electric rates

economic development benefits totaling $2.4 billion

energy-efficiency measures that will save consumers more than $1.8 billion in energy costs

more than 23,000 job-years of work (a job-year is just what it sounds like—one year’s worth of work for one person)

Here’s just a snapshot of what that looks like on the ground in participating states:

In Connecticut, RGGI-funded efficiency upgrades are enabling the Connecticut Children’s Medical Center, in Hartford, to save $23,000 a year on energy—benefits that accrue not just to the medical center itself but to its young patients as well.

In New York, some RGGI money funds job-training for people interested in joining the growing energy-efficiency field, helping hundreds of people find work.

In Maryland, the state uses some of its RGGI money to help low-income residents with their energy bills.

And in New Hampshire the state’s RGGI program decided to help manufacturers, like Foss Manufacturing in Hampton, become more energy efficient. The upgrades have made a huge difference in operating costs, says Facilities Engineer Mike Snelling. “Anything that cuts down our electricity costs and our natural gas costs helps us stay competitive.”

RGGI is also reducing public health costs in participating states. That’s because the carbon limits also help reduce air pollutants like sulfur dioxide and nitrogen oxide, which contribute to asthma attacks, heart attacks, lung cancer, emphysema and premature deaths. This is estimated to have saved the region at least $10.4 billionin healthcare costs since the program started thanks to avoided illnesses, hospital visits, lost work and school days and premature deaths. That’s a lot of money—and more importantly, it means a healthier population.

You can see the impact of RGGI by comparing what’s happened in RGGI states to what’s happened nationwide over the same time period. These are the facts: Since early 2009, carbon emissions in the RGGI region have dropped 2.7 times faster than in the rest of the nation, while RGGI states’ economies have grown 2.5 times faster than those of other states. In RGGI states, between 2008 and 2012, investing in energy efficiency increased by 186 percent thanks to money generated for clean energy through the program; in non-RGGI states, the increase was 110 percent. (Many of these RGGI investments are in energy efficiency programs which return as much as three to four dollars for every dollar invested.)

RGGI is proof that cutting carbon can translate into tremendous economic gains. Over the last five years, the program has proved that fighting climate change can lower electric bills, create jobs, stimulate big-time economic growth, and help clean up the air for our kids breathe.